|
on Energy Economics |
|
Issue of 2012‒10‒13
forty papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Meier, H.; Jamasb, T.; Orea, L. |
| Abstract: | The residential demand for energy is growing steadily and the trend is expected to continue for the foreseeable future. Household spending on energy services tends to increase with income. We explore household total spending on energy and on electricity and gas separately. We use an extensive British household panel data with more than 77,000 observations for the 1991-2007 period to explore the determinants of energy spending. We analyse income as a main driver of spending on energy and draw Engel spending curves for these. The lack of household level price data in liberalized retail energy markets is addressed by a new modelling approach to reflect within and between regional differences in energy prices. Also, long run changes in energy spending of households are approximated by exploring unit effects. The main results show the Engel spending curves are S-shaped. Income elasticities for energy spending are U-shaped and lower than unity, suggesting that energy services are a necessity for households. Moreover, the findings show that the income elasticity of energy spending is somewhat higher in the long run. Finally, we find a dynamic link between energy spending and income changes rather than a fixed budget threshold where basic needs are met. Hence, we suggest policy approaches that enable households to find their individual utility maximizing energy spending levels.Keywords: Burr distribution; Durations; Range; Score; Un-observed components; Weibull distribution |
| JEL: | C23 D12 Q41 |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1239&r=ene |
| By: | Kelly, S.; Pollitt, M.; Crawford-Brown, D. |
| Abstract: | Improving the efficiency and performance of the UK residential sector is now necessary for meeting future energy and climate change targets. Building Performance Evaluation and Certification (BPEC) tools are vital for estimating and recommending cost effective improvements to building energy efficiency and lowering overall emissions. In the UK, building performance is estimated using the Standard Assessment Procedure (SAP) for new dwellings and Reduced SAP (RdSAP) for existing dwellings. Using a systems based approach we show there are many opportunities for improving the effectiveness of BPEC tools. In particular, if the building stock is going to meet future energy and climate change targets the system driving building energy efficiency will need to become more efficient. In order to achieve this goal, building performance standards across Europe are compared highlighting the most effective strategies where they are found. It is shown that the large variance between estimated and actual energy performance from dwellings in the UK may be preventing the adoption of bottom-up energy efficiency measures. We show that despite popular belief, SAP and RdSAP do not estimate building energy efficiency but instead attempt to estimate the cost-effective performance of a building and thus create perverse incentives that may lead to additional CO2 emissions. In this regard, the SAP standard confounds cost-effectiveness, energy efficiency and environmental performance giving an inadequate estimate of all three policy objectives. Important contributions for improving measurement, analysis, synthesis and certification of building performance characteristics are offered. |
| Keywords: | Dwellings; Building Stock; Buildings; SAP; Energy Performance Certificates; Efficiency, Energy Demand. |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1238&r=ene |
| By: | Luca Guerrieri (Federal Reserve Board); Martin Bodenstein (Asian Development Bank and Federal Reserve Board) |
| Abstract: | The macroeconomic implications of oil price fluctuations vary according to their sources. Our estimated two-country DSGE model distinguishes between country-specific oil supply shocks, various domestic and foreign activity shocks, and oil efficiency shocks. Changes in foreign oil efficiency, modeled as factor-augmenting technology, were the key driver of fluctuations in oil prices between 1984 and 2008, but had modest effects on U.S. activity. A pickup in foreign activity played an important role in the 2003-2008 oil price runup. Beyond quantifying the responses of oil prices and economic activity, our model informs about the propagation mechanisms. We find evidence that nonoil trade linkages are an important transmission channel for shocks that affect oil prices. Conversely, nominal rigidities and monetary policy are not. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:25&r=ene |
| By: | Gawel, Erik; Strunz, Sebastian; Lehmann, Paul |
| Abstract: | The German energy transition repeatedly faces harsh critiques questioning its economic and environmental merit. This article defends the Energiewende and argues that Germany has chosen a rational and particularly forceful approach to securing sustainable energy supply. Though current expenditures are high, the long-run benefits of transforming the energy system to a renewables-based system are likely to outweigh present investment costs. Furthermore, support policies for renewables are not redundant - as some critics claim - but complement other policy instruments, such as the emissions trading scheme. The article also addresses the motives behind the discrediting attacks on the German energy policy regime. Defense actions by beneficiaries of the former energy market structure are only to be expected, but the attacks from liberal economists are astonishingly fierce. -- |
| Keywords: | energy supply,energy transition,externalities,Germany,renewable energy sources,support policies,sustainability |
| JEL: | D62 H54 Q42 Q48 Q53 Q54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:152012&r=ene |
| By: | Martin Plešivèák; Martin Maèanga |
| Abstract: | The issue of energy prices presents an extremely topical theme with a major impact on human society. Energy demand is constantly increasing and most regions of the world are facing serious difficulties in ensuring sufficient energy supplies. However, not only global events affect energy prices in the particular country. National energy markets are highly specific and some local factors may also prove as significant. In our contribution we focus on the Slovak Republic and try to analyze the major political and economic factors affecting the final price of energy, particularly of gas, electricity, heat and water. Political environment in Slovakia is characterized by frequent changes of governments with different ideological orientations manifested by different pricing policy. We pay attention mainly to the period after country's accession to the European Union, since this moment is associated with a wide range of major changes. Largely monopolized energy market has been gradually opening up to competition and the countries with regulated prices have been facing the increasing pressure to let the free market decide. Progressive liberalization of energy markets enables consumers to use the energy services offered by various private companies. This new element operating in the energy sector is largely reflected in final energy prices. Furthermore, this process is not still finished. Pricing policy is highly sensitive issue as it affects both the domestic and industrial consumers. In many EU countries, the state retains control over the prices of both the electricity and gas for final consumers. In most cases, it means result of efforts to shield the households and industry from violent fluctuations in prices. However, it shows as extremely difficult, since a fight against climate change becomes a political priority for the EU at the same time. It also includes efforts to minimize the using of fossil fuels and to achieve a transition to renewable energy, although this alternative is frequently associated with higher cost of production. Thus, the main goal of this study is to highlight the price disparities between different energy commodities and to explain the spatial differentiation within particular regions of Slovakia, since we are currently witnesses of significant regional disparities in energy prices. The explanation of these territorial particularities might be helpful for the entire spectrum of state and local institutions in the creation of the most suitable pricing strategy. Keywords: energy prices, market liberalization, pricing policy, regional disparities N74 - Europe: 1913– |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p917&r=ene |
| By: | Blancard, Stephane; Martin, Elsa |
| Abstract: | ADEME (the French national environmental and energy agency) develops tools in order to measure farm energy performance. The actual measurement is based on the total amount of energy consumed by farmers. The main objective of this paper is to propose an alternative method that can be used in order to improve this measurement. The alternative method that we propose is based on Data Envelopment Analysis (DEA) models. Following the procedure adopted in a cost framework by Farrell (1957) and developed by Färe et al. (1985), we propose to decompose an overall energy performance measurement into two components, namely technical and allocative performances. In order to do this, we replace prices by energy content of inputs. We show that this decomposition can considerably help policy makers to design accurate energy policies. The presence of uncertainty on data, and more particularly on energy content of inputs, leads us to recommend exploiting the methodology proposed by Camanho and Dyson (2005) in order to produce more robust results. Thus, this methodology allows deriving both upper and lower bounds for the performance measurements. A year 2007 database of French farms specialized in crops is used for empirical illustration. |
| Keywords: | Crop-farming, Data Envelopment Analysis, energy performance, uncertainty, Crop Production/Industries, Risk and Uncertainty, D24, O13, Q15, Q4, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135123&r=ene |
| By: | Soushi Suzuki; Peter Nijkamp; Piet Rietveld |
| Abstract: | Japan is faced with a ÂgFukushimaÂf problem, meaning a nuclear accident leading to electrical power shortage. This problem relates to a non-balanced ÂgEnergy-Environment-EconomicÂh policy which does not, but should incorporate Âgelectrical power savingÂh, Âglow carbon emissionÂh, and Âgeconomic growthÂh. Although it is difficult at this stage, it is necessary to make an effort to achieve more balanced and more efficient ÂgEnergy-Environment-EconomicÂh policy in Japan, even if Japan decides to withdraw from the COP (Conference of Parties of United Nations Conventions) 17. A standard tool to judge the efficiency of actors (decision making units) is Data Envelopment Analysis (DEA). The existence of many possible efficiency improvement solutions has in recent years prompted a -rich variety of literature on the methodological integration of the MOLP (Multiple Objective Linear Programming) and the DEA models. In the past years, much progress has been made to extend this approach in several directions. An example is the Distance Friction Minimization (DFM) method. The DFM model is based on a generalized distance friction function and serves to improve the performance of a Decision Making Unit (DMU) by identifying the most appropriate movement towards the efficiency frontier surface. Standard DEA models use a uniform proportional input reduction (or a uniform proportional output increase) in the improvement projections, but the DFM approach aims to enhance efficiency strategies by introducing a weighted projection function. This approach may address both input reduction and output increase as a strategy of a DMU. An advantage of this model is that there is no need to incorporate the value judgment of a decision maker. Nevertheless, in order to achieve efficiency improvement in JapanÂfs ÂgEnergy-Environment-EconomicÂh policy at a regional level, it might be necessary to incorporate a value judgment of a policy maker on political priorities. In our study, we present a newly developed Preference Allocation model in DFM, which is suitable to incorporate a decision makerÂfs value judgment for the allocation of an input reduction and an output augmentation in an efficiency improvement projection. The above-mentioned Preference Allocation model is illustrated on the basis of an application to the efficiency analysis of ÂgEnergy-Environment-EconomicÂh for each prefecture in Japan. Keywords: Data Envelopment Analysis (DEA), Distance Friction Minimization (DFM), Preference Allocation (PA), Energy-Environment-Economic efficiency JEL code: C00, Q48, R58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p332&r=ene |
| By: | Muhammad, Shahbaz; Qazi , Muhammad Adnan Hye; Muhammad, Zeshan |
| Abstract: | The aim of present study is to re-investigate the impact of renewable energy consumption on economic growth by incorporating capital and labor as potential determinants of production function in case of Pakistan. We have used the ARDL bounds testing and rolling window approach (RWA) for cointegration. The causality analysis is conducted by applying the VECM Granger causality and innovative accounting approaches. The results showed that all the variables are cointegrated for long run relationship. Renewable energy consumption, capital and labor boost economic growth. The causality analysis indicated bidirectional causality between economic growth, renewable energy consumption and capital over the period of 1972Q1-2011Q4. The study opens up new directions for policy makers to explore new sources of energy sustain economic growth. |
| Keywords: | Renewable Energy; Economic Growth; Rolling Window Approach |
| JEL: | Q4 |
| Date: | 2012–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41608&r=ene |
| By: | Francesco Garibaldo; Nicole Orlando; Gianluca Parodi (Università di Bologna); giorgio.tassinari@unibo.it (Università di Bologna) |
| Abstract: | The aim of this work is to analyze the development of Green Economy in the Emilia-Romagna Region. Sustainability and efficiency are seen as springs of development to be pushed overall in a period of global economic crisis. Starting from the distinction of Green Production and Green Products, the authors have investigated the evolution of the sector in the last years, in particular analyzing the number of enterprises and products with environmental certifications and their economic performance. A special focus have been made regarding the production of Renewable Energy Sources and the EU objectives. Furthermore it has been explored the Agri-food sector, underlining its relationship with the environment and the threats given by Climate Change, and on the other side the opportunities linked to agro-energies and organic productions. The authors have made some on field interviews to operators and firms of different sector in order to better understand their perspective regarding Green Economy markets. Additionally to underline some strategic guidelines to be followed by governments to better implement structural changes to raise efficiency and to further green the economical production |
| Keywords: | Green Economy, Sviluppo Sostenibile, Produzioni Verdi, Prodotti Verdi, Fonti di Energia Rinnovabili, Settore Agroalimentare, Biologico Green Economy, Sustainable Development, Green Products, Green Production, Renewable Energy Sources, Agri-food sector, Organi |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bot:quadip:116&r=ene |
| By: | Lawrence M. Ausubel (Economics Department, University of Maryland); Peter Cramton (Economics Department, University of Maryland) |
| Abstract: | The best sites for offshore wind farms on the US Outer Continental Shelf are scarce. To make the best use of this scarce resource, it is necessary to implement a fair and efficient mechanism to assign leases to companies that are most likely to develop off-shore wind energy projects. Coastal states, particularly along the eastern seaboard, are taking aggressive actions to spur the growth of an offshore wind sector in their states to help meet their renewable portfolio targets while nurturing the supporting on-shore infrastructure. This paper compares the various auction formats described in “Auction Design for Wind Rights” (Ausubel and Cramton 2011a), and the multiple factor considerations documented in “Multiple Factor Auction Design for Wind Rights” (Ausubel and Cramton 2011b). The paper describes in further detail four different clock auction designs for auctioning these alternative energy leases and highlights considerations that should be factored into the auction rules. |
| Keywords: | Auctions, clock auctions, spectrum auctions, market design, wind rights auctions |
| JEL: | D44 C78 L96 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:11accw&r=ene |
| By: | Peter Cramton (Economics Department, University of Maryland); Axel Ockenfels |
| Keywords: | Auctions, electricity auctions, capacity auctions, reliability auctions |
| JEL: | D44 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:11cocaps&r=ene |
| By: | Lawrence M. Ausubel (Economics Department, University of Maryland); Peter Cramton (Economics Department, University of Maryland) |
| Abstract: | The best sites for offshore wind farms on the US Outer Continental Shelf are scarce. To make the best use of this scarce resource, it is necessary to implement a fair and efficient mechanism to assign wind rights to companies that are most likely to develop off-shore wind energy projects. Coastal states, particularly along the eastern seaboard, are taking aggressive actions to spur the growth of an offshore wind sector in their states to help meet their renewable portfolio targets while nurturing the supporting on-shore infrastructure. This paper discusses the design of multi-factor auctions for wind rights, in which multiple factors are used in bid evaluation. This may be especially useful in settings where states (and potential bidders) have already taken actions to foster offshore wind development. The paper complements Ausubel and Cramton (2011) on the design of price-only auctions for wind rights. |
| Keywords: | Auctions, clock auctions, spectrum auctions, market design, wind rights auctions |
| JEL: | D44 C78 L96 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:11acmf&r=ene |
| By: | Lawrence M. Ausubel (Economics Department, University of Maryland); Peter Cramton (Economics Department, University of Maryland) |
| Abstract: | The best sites for offshore wind farms on the US Outer Continental Shelf are scarce. To make the best use of this scarce resource, it is necessary to implement a fair and efficient mechanism to assign wind rights to companies that are most likely to develop off-shore wind energy projects. Coastal states, particularly along the eastern seaboard, are taking aggressive actions to spur the growth of an offshore wind sector in their states to help meet their renewable portfolio targets while nurturing the supporting on-shore infrastructure. This paper discusses the design of auctions for wind rights in which price is the sole factor of competition. A second paper, Ausubel and Cramton (2011), extends the analysis to auctions in which multiple factors are used in bid evaluation. This may be especially useful in settings where states (and potential bidders) have already taken actions to foster offshore wind development. |
| Keywords: | Auctions, clock auctions, spectrum auctions, market design, wind rights auctions |
| JEL: | D44 C78 L96 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:11acadw&r=ene |
| By: | Peter Cramton (Economics Department, University of Maryland); Axel Ockenfels |
| Abstract: | Capacity markets are a means to assure resource adequacy. The need for a capacity market stems from several market failures the most prominent of which is the absence of a robust demand-side. Limited demand response makes market clearing problematic in times of scarcity. We present the economic motivation for a capacity market, present one specific market design that utilizes the best design features from various resource adequacy approaches analyzed in the literature, and we discuss other instruments to deal with the problems. We then discuss the suitability of the market for Europe and Germany in particular. |
| Keywords: | Auctions, electricity auctions, capacity auctions, reliability auctions |
| JEL: | D44 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:12cocap&r=ene |
| By: | Jägemann, Cosima (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this paper, the implications of alternative decarbonization pathways for Europe's power sector up until the year 2050 are analyzed. In speci fic, an electricity system optimization model is used to investigate the minimal costs of decarbonization under a stand-alone CO2 reduction target and to quantify the excess costs associated with renewable energy targets and politically implemented restrictions on alternative lowcarbon technologies, such as nuclear power. Our numerical simulations con firm the theoretical argumentation concerning counterproductive overlapping regulation. The decarbonization of Europe's power sector is found to be achieved at minimal costs under a stand-alone CO2 reduction target (171 bn €2010). Additionally implemented RES-E targets lead to signi cant excess costs of at least 237 bn €2010. Excess costs of a complete nuclear phase-out in Europe by 2050 are of the same order of magnitude (274 bn €2010). |
| Keywords: | Electricity; CO2 target; renewable target; excess costs; optimization model |
| JEL: | C61 Q40 Q50 |
| Date: | 2012–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2012_013&r=ene |
| By: | Luciano I. de Castro; Peter Cramton (Economics Department, University of Maryland) |
| Abstract: | Forecasting electricity demand for future years is an essential step in resource planning. A common approach is for the system operator to predict future demand from the estimates of individual distribution companies. However, the predictions thus obtained may be of poor quality, since the reporting incentives are unclear. We propose a prediction market as a form of forecasting future demand for electricity. We describe how to implement a simple prediction market for continuous variables, using only contracts based on binary variables. We also discuss specific issues concerning the implementation of such a market. |
| Keywords: | electricity market design, prediction markets |
| JEL: | D44 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:09ccpre&r=ene |
| By: | Gunther Bensch; Jörg Peters; Maximiliane Sievert |
| Abstract: | Providing access to electricity is widely considered as a precondition for socio-economic development in rural areas of developing countries. While electrification interventions are often expected to reduce poverty through productive uses for income generating purposes, the reality in rural usage patterns looks different: Electricity is often used for lighting and entertainment devices only. It is particularly lighting with its implications for security and convenience that explains the high importance beneficiaries assign to electrification. Against this background, this paper probes into the effects of Solar Home System electricity usage on lighting consumption and activities after nightfall using cross-sectional household-level data from rural Senegal. We apply a new matching algorithm to control for a possible self-selection into Solar Home System ownership and find substantially higher lighting usage and study time after nightfall of school children. We also find some indication for improvements in perceived security. |
| Keywords: | Rural electrification; energy access; impact evaluation; matching |
| JEL: | O12 O13 O18 O22 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0369&r=ene |
| By: | Georg Hirte; Stefan Tscharaktschiew |
| Abstract: | Many governments subsidize electric mobility (E-mobility) to increase the share of electric vehicles (EV) in the car fleet. This aims at reducing carbon emissions. Despite that there is not much research on the full economic costs and benefits of this measures. There are only a few Cost Benefit Analyses (CBA). They, however, do not take into account repercussion and substitution effects. We fill this gap in the literature and examine subsidies to EVs in a full spatial general equilibrium model. Since cities are the main area were EVs will be used, we focus on cities and apply a spatial approach. In particular, we ask whether it is optimal to subsidize or tax electric vehicles and, how large, the corresponding optimal rate is. We, first, derive analytically the optimal subsidy in a spatial partial equilibrium model of a city with two zones where commuting, carbon emissions, endogenous labor supply, fuel and power taxes are considered and where we distinguish between fuel vehicles and electric vehicles. There we find that the optimal subsidy rate is the sum of changes in externality costs (emissions + congestion), an opposite tax interaction effect, a redistribution effect between cities inhabitants and absentee landlords and a cost effect due to higher costs of producing travelling with power in comparison to fuel. The latter two effects are usually not considered in CBAs. Second, we extend the model to a full spatial general equilibrium model and employ simulations to calculate sign and size of the optimal subsidy or tax rate. This model is calibrated to a typical German metropolitan area. The results show that electric vehicles should not be subsidized but taxed. The results are robust with respect to changes in the willingness to adopt electric vehicles (EVs), changes in fix costs of EVs, and even if emission of EVs are zero. We change all these parameters to capture extreme and very unlikely behavior such as a very high demand elasticity of EVs with respect to the power tax rate, very low costs and the case that EVs have zero CO2 emissions. Concerning these variables we suggest that EVs should not be subsidized because welfare costs of achieving a small reduction in emissions are very high. We draw the conclusion that E-mobility might only be an efficient policy if it is considered as complement to other policies. This issue is left for future research. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p324&r=ene |
| By: | Nobuhiro Hosoe (National Graduate Institute for Policy Studies) |
| Abstract: | After the Great East Japan Earthquake and the subsequent nuclear accident, nuclear power stations cannot be considered safe any longer and, thus, can be hardly allowed to restart in Japan. In this study, we develop a nine-region spatial equilibrium model for the Japanese power market and simulate two-part situations: (1) none of the nuclear power plants can operate any longer and (2) gas turbine combined cycle (GTCC) power plants are installed to fully cover the lost capacity of the nuclear power plants. When all the nuclear power plants are shut down, the average power prices would rise by 1.5–3 yen/kWh. By substituting their capacity with the GTCC power plants, we could compress the average price rise as high as 0.5–1.5 yen/kWh compared with the status quo. Their impact, however, would differ by region on the basis of the share of nuclear power in their plant portfolios. When nuclear power is fully available, inter-regional transmission is mainly driven by the abundant base-load capacity, including nuclear power, during the nighttime. After the nuclear power plant shutdown, the regions with abundant nuclear power capacity would not be able to afford to sell their power to other regions and this would cause less serious congestion at the inter-regional transmission links. The installation of GTCC power plants would make the plant portfolios more similar among regions and, thus, reduce inter-regional transmission further, which causes congestion very rarely. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:12-11&r=ene |
| By: | Krane, J. |
| Abstract: | In the midst of a shortage of natural gas, Abu Dhabi has launched an investment into renewable energy. Why? Will renewables allow the Persian Gulf sheikhdom to meet rising electricity demand without simultaneous increases in conventional power? No. Even in one of the world’s sunniest places – but not one of its windiest – conventional solar generation is unable to handle a demand peak that extends past sundown. Renewables offer an intermittent electricity supply at a much higher average cost than the existing gasfired system. Abu Dhabi will be neither able to forgo construction of a single conventional generating plant, nor reduce its reliance on gas imports from Qatar. The contribution to energy security will be negligible. This paper finds two main benefits, among several limitations. First, renewables may allow reduced fuel consumption in conventional power plants, which will cut carbon emissions and burning of expensive backup fuels. Second, the highly publicized investment has improved the regime’s international image, bringing acclaim as a leader in clean energy, despite its status as a key OPEC oil producer. In the political context of a rentier monarchy, such prestige is as an important source of domestic legitimacy. |
| Keywords: | renewables, natural gas, energy security, subsidies, Abu Dhabi, United Arab Emirates, Persian Gulf, GCC, OPEC, rentier state, monarchy |
| JEL: | P42 Q41 Q42 Q48 |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1237&r=ene |
| By: | Christophe Heyndrickx; Victoria Alexeeva - Talebi; Natalia Tourdyeva |
| Abstract: | The present paper studies the effect of an upward correction of the natural gas price on the Russian domestic market. Russia has the largest gas reserves in the world and currently produces around 550 billion cubic meters of gas each year. Sixty percent of the production is sold domestically at prices below long term marginal cost, for households and for industrial producers. The pricing of natural gas is currently a hot topic in Russia, as the Russian government proposes to liberalize the regulated domestic market price and decrease subsidies for natural gas products. This is claimed to fit in a policy promoting energy efficiency, increasing investments in natural gas production and bringing the natural gas price on the domestic market closer to long term cost recovery. We will approach the issue of gas pricing through taxation of intermediate and final use of natural gas for domestic industries and consumers. Considerable attention is given to economic impacts, environmental issues and social effects of gas pricing. We compare several scenarios of differential gas pricing, simulating increases in price for industrial and private consumers at different annual growth rates, with a time horizon from 2012 until 2020. Our results are based on an application of the SUSTRUS model, a novel computable general equilibrium model, which was developed in the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub module and standard applied general equilibrium techniques. We find that deregulating natural gas pricing can lead to a significant improvement in energy efficiency, if prices are gradually increased for both consumers and industries alike. Differences in regional energy efficiency decrease, but are still significant. We show that increasing the consumer price of gas is indeed a regressive policy, but can be compensated for by the government. Keywords: Regional general equilibrium modeling, sustainability, energy, natural gas, pricing, policy JEL codes: R13,Q01,Q41,Q48,Q56 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p113&r=ene |
| By: | Marcel Boyer; Éric Gravel |
| Abstract: | <P>Nous avons procédé à une évaluation du projet VEGA de Northern Canada Gas (NCG) dans le but de montrer comment l’approche options réelles peut s’appliquer à ce type de projet. Bien que réaliste, cette étude est basée sur un cas fictif. Ainsi, elle se veut plutôt exploratoire quant à l’application éventuelle de l’approche à l’évaluation des investissements. |
| Keywords: | , évaluation des investissements, gaz naturel, options réelles, flexibilité managériale |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-26&r=ene |
| By: | Albrecht, Ernst; Henning, Christian H.C.A. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133014&r=ene |
| By: | Patton, Myles; Binfield, Julian C.R.; Kim, In Seck; Zhang, Lichun; Davis, John |
| Abstract: | The expansion of the EU biofuel sector in recent years has led to speculation that the linkages between the oil and agricultural markets has strengthened and resulted in increased transmission of price volatility. This study uses the FAPRI European modelling system, which includes a UK model, to explore the energy-biofuel-agricultural market linkages in the EU. The complete modelling system is a dynamic, partial equilibrium, multi-commodity model of the EU agriculture and liquid biofuel for transportation sectors. A stochastic approach is used in which the modelling system is simulated 500 times under different paths of oil prices and world commodity prices. This stochastic approach provides a means to analyse the impact of alternative crude oil prices on the biofuel and agricultural sectors. The model simulations demonstrate the complex interactions between the different sectors. |
| Keywords: | Policy modelling, partial equilibrium model, UK, agricultural policy, Agricultural and Food Policy, Crop Production/Industries, |
| Date: | 2012–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134717&r=ene |
| By: | Kay, Adrian; Ackrill, Rob |
| Abstract: | The scale of the ambition to decouple emissions growth from energy consumption in the economy runs counter to several decades of debates and literatures on the limits of government. Transport biofuels are an early and influential case of the policy capacity challenge in the transition to low-carbon economies. The case stands analytically for the policy-maker’s dilemma of maintaining longer term policy goals as credible commitments, even though considerable flexibility and adaptability in policy-making is required to reach those far horizon goals in conditions of high technological and market uncertainty. In such terms, this paper compares US and EU biofuels policy processes, revealing an intertemporal choice which tests the capacity to account for the future benefits of a low carbon future in current policy processes; because if the pathway to their achievement is uncertain and politically contested in the implementation phase, then those future benefits may be heavily discounted, shortening policy-maker horizons and rendering the overall transition process politically vulnerable. |
| Keywords: | Biofuels, Policy Capacity, Policy Implementation, Policy Making, Crop Production/Industries, Q28, Q41, Q48, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135122&r=ene |
| By: | Purkus, Alexandra; Gawel, Erik; Thrän, Daniela |
| Abstract: | Bioenergy can play an important part in managing the transition towards a lowcarbon energy system. However, in many countries its rapid expansion increases pressures on agricultural land use and natural ecosystems, resulting in conflicts with conservation aims and food security. Establishing an effective governance framework for bioenergy, to safeguard against sustainability risks and promote the efficient use of scarce biomass resources, is of the utmost importance, but is complicated by the existence of multiple objectives, multiple market failures and the variety of possible value chains. In this situation, policy recommendations based on neoclassical assumptions prove too abstract to be of practical relevance. Using the case of European bioenergy policy, this paper explores how economic bioenergy policy recommendations could be improved by using a new institutional economics (NIE) perspective. Moving along the value chain, we discuss what implications the consideration of transaction costs, incomplete information, path dependencies, and political feasibility has for finding solutions to the governance challenges of bioenergy. We conclude that policy implications derived from NIE differ clearly both from neoclassical recommendations and current EU bioenergy policy, and that a NIE framework for the analysis of bioenergy governance, which takes not only market failures, but also the risks of government failures into account, could make a useful contribution to the development of realistic, second-best solutions to the allocative problems of bioenergy use. -- |
| Keywords: | bioenergy policy,renewable energy policy,climate change mitigation,new institutional economics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:132012&r=ene |
| By: | Ai Leon (National Institute for Agro-Environmental Sciences (NIAES)); Roberto Leon (National Graduate Institute for Policy Studies) |
| Abstract: | In 2010, concerns regarding Japan’s excessive dependence on imports for food and energy caused the Japanese government to introduce subsidies to stimulate biofuel crop production. In this paper, we study the viability of price subsidies and certain other policies with respect to increasing the production of biofuel crops. First, we estimate the elasticity of the supply of Japanese agriculture with respect to price (inclusive of the subsidy for each unit of production). For this purpose, we use a longitudinal database of 1822 municipalities that covers all 47 prefectures of Japan. This database includes information about the production of 116 crops and their respective revenues, including subsidies. Using panel data regression techniques, we determine that although the long-run supply of certain crops is highly elastic, this supply is highly inelastic if the production of other crops is held constant. Therefore, an increase in the demand for biofuel crops will cause substantial price increases of agricultural products, largely crowding out the demand for food crops. We then discuss the viability of encouraging various agricultural practices, such as multiple cropping and the cultivation of recently abandoned land. Instead of using abandoned land, which produces a lower yield and requires abundant labor, we recommend a multiple cropping system that involves the rotation of rice and wheat. Although these measures will increase biofuel crop production to a certain extent in the short run, full-scale biofuel crop production can only take place after substantial reforms are implemented to increase the production capacity of the Japanese agricultural sector. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:12-10&r=ene |
| By: | Carolyn Fischer, Mads Greaker and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage. For most types of pollution, abatement technologies are available for firms to produce with lower emissions. However, the suppliers of those technologies tend to be less than perfectly competitive, particularly when both emissions regulations and advanced technologies are new. In this context of twin market failures, we consider the relative effects and desirability of subsidies for abatement technology. We find a more robust recommendation for upstream subsidies than for downstream subsidies. Downstream subsidies tend to increase global abatement technology prices, reduce pollution abatement abroad and increase emission leakage. On the contrary, upstream subsidies reduce abatement technology prices, and hence also emissions leakage. |
| Keywords: | Emissions leakage; Abatement subsidies; Upstream technology market |
| JEL: | Q54 H23 L13 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:708&r=ene |
| By: | Koundouri, Phoebe; Kountouris, Yannis; Stithou, Mavra |
| Abstract: | This paper presents the results of a Choice Experiment (CE) conducted to estimate the values derived from a highway construction project in Greece. To account for preference heterogeneity conditional logit with interactions and random parameter logit models are estimated. The results indicate that individuals have significant values for travel time savings, percentage decrease in traffic accidents, percentage decrease in traffic related emissions and landscape modifications. Models where the attributes are interacted with socioeconomic variables perform better and produce lower welfare estimates compared to models without interactions with important implications for cost benefit analysis. |
| Keywords: | Choice experiments; transport infrastructure;travel time savings; accidents; pollution reduction |
| JEL: | C9 N7 C93 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38274&r=ene |
| By: | Randy A. Becker; Carl Pasurka, Jr.; Ronald J. Shadbegian |
| Abstract: | It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity - that is, their pollution abatement operating costs per unit of economic activity - as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms. |
| Keywords: | environmental regulation, costs, business size, U.S. manufacturing |
| JEL: | Q52 L51 L6 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-25&r=ene |
| By: | NICOLA CONIGLIO; KENJI KONDOH |
| Abstract: | Differences in environmental regulation between rich and poor countries have caused a geographical relocation of polluting industry from the former to the latter. In several cases the reduction in domestic emissions is at least partly compensated by an increase in trans-boundary pollution which is detrimental to the productivity of environmental sensitive sectors (such as agriculture) industry in a developed country. Can a government in a rich country try to correct the negative consequences of trans-boundary pollution when mechanisms such as binding international agreements are difficult to implement? In this paper we build a simple North-South model of trade where the manufacturing plants are completely outsourced in a developing country and we analyze the effects of a subsidy program to pollution abatement industry located in the North. We find that, contrarily to common intuition, the subsidy to the pollution abatement equipment industry might reduce welfare in the North when the efficiency of the pollution abatement technology is already relatively high and when the wage gap between the North and South is high. In addition we find that international migration might have a positive impact on improving the environmental stock and welfare in the North and might be a more efficient and less distortive way to address the trans-boundary externality. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p74&r=ene |
| By: | Mariam Camarero (Departamento de Economía. Universidad Jaume I, Spain); Andrés J. Picazo-Tadeo (Departamento de Economía Aplicada II. Universidad de Valencia, Spain); Cecilio Tamarit (Departamento de Economía Aplicada II. Universidad de Valencia, Spain) |
| Abstract: | This paper studies convergence in CO2 emission intensity (CO2 over GDP) among OECD countries over the period 1960-2008 based on its determinants, namely, energy intensity (energy consumption over GDP) and the so-called carbonisation index (CO2 emissions over energy consumption). We apply the Phillips and Sul (2007) methodology, which tests for the existence of convergence clubs. Our results highlight that differences in emission intensity convergence are more determined by differences in convergence of the carbonisation index rather than by differences in the dynamic convergence of energy intensity. |
| Keywords: | convergence; OECD; CO2 emission intensity; energy intensity; carbonisation index |
| JEL: | C15 C22 Q53 Q54 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1215&r=ene |
| By: | Cathrine Hagem, Bjart Holtsmark and Thomas Sterner (Statistics Norway) |
| Abstract: | We analyze two mechanism designs for refunding emission payments to polluting firms; Output Based (OB) and Expenditure Based (EB) refunding. In both instruments, emissions fees are returned to the polluting industry, possibly making the policy more easily accepted by policymakers than a standard tax. The crucial difference between OB and EB is that the fees are refunded in proportion to output in the former, but in proportion to the firms’ expenditure on abatement equipment in the latter. We show that to achieve a given abatement target, the fee level in the OB design exceeds the standard tax rate, whereas the fee level in the EB design is lower. Furthermore, the use of OB and EB refunding may lead to large differences in the distribution of costs across firms. Both designs do, strictly speaking, imply a cost-ineffective provision of abatement as firms put relatively too much effort into reducing emissions through abatement technology compared with emission reductions through reduced output. However, this may be seen as an advantage by policymakers if they seek to avoid activity reduction in the regulated sector. We provide some numerical illustrations based on abatement cost information from the Norwegian NOx fund. |
| Keywords: | Refunded charge; Output based; expenditure based; NOx; Tax-subsidy; policy design |
| JEL: | Q28 Q25 H2 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:705&r=ene |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | Global cap and trade equalizes the price of emissions and leads to efficient abatement across countries, but sets the abatement level inefficiently low. It is set too low, because the global cap is the sum of individual country targets set on the basis of self-interest. The efficiency of a single price does not overcome the inefficiency of the public-goods problem inherent in global cap and trade. Fortunately, other policies lead to more cooperative and, hence, more efficient outcomes. Replacing the national quantity targets of global cap and trade with a global price target improves outcomes. To improve outcomes further, the price target is combined with a Green Fund. As we demonstrate by example, the Green Fund can induce cooperation between rich countries that want a high global price and poor countries that are more concerned with Green-Fund payments. |
| Keywords: | global warming, climate change, climate treaty, cap and trade, carbon tax, carbon price, public goods |
| JEL: | Q54 Q56 Q58 H41 D78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:12cshtf&r=ene |
| By: | Chatzopoulos, Thomas; Schmidtner, Eva; Lippert, Christian |
| Keywords: | Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133855&r=ene |
| By: | Johannes Bollen; Corjan Brink (PBL) |
| Abstract: | <p>This paper (CPB/PBL) uses the computable general equilibrium model WorldScan to analyse interactions between EU’s air pollution and climate change policies.</p><p>Covering the entire world and seven EU countries, WorldScan simulates economic growth in a neo-classical recursive dynamic framework, including emissions and abatement of greenhouse gases (CO<sub>2</sub>, N2O and CH4) and air pollutants (SO2, NOx, NH3 and PM2.5). Abatement includes the possibility of using end-of-pipe control options that remove pollutants without affecting the emissionproducing activity itself. This paper analyses several variants of EU’s air pollution policies for the year 2020. Air pollution policy will depend on end-of-pipe controls for not more than 50%, thus also at least 50% of the required emission reduction will come from changes in the use of energy through efficiency improvements, fuel switching and other structural changes in the economy. Greenhouse gas emissions thereby decrease, which renders climate change policies less costly. Our results show that carbon prices will fall, but not more than 33%, although they could drop to zero when the EU agrees on a more stringent air pollution policy.</p> |
| JEL: | Q53 Q54 Q42 D58 H21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:220&r=ene |
| By: | Huifang Tian; Xiaojun Shi; John Whalley |
| Abstract: | The UNFCCC process of negotiating multilateral carbon emissions reductions thus far has focused on approximately equiproportional cuts in annual carbon emissions by country along the lines of the Kyoto Protocol agreement. But now, with the objective of involving large developing countries such as China and India in a post 2012 regime, broader considerations imply alternative approaches to emissions reduction arrangements by countries be considered. Here we consider the implications of alternative cross country fairness considerations entering the global negotiation process using a numerical simulation model which captures the potential impacts of alternative emission reductions across major economies which in turn reflect different fairness arguments. We put other fairness considerations, such as intergenerational equity, on one side. We use a global equilibrium emissions and trade model with transfers which are calibrated to a 2005-2050 BAU scenario and treats damage from climate change as utility damage. It thus captures the benefit side of emissions reduction agreements as well as the implications of such considerations for financial transfers agreed as a part of the process. Our analyses consider four alternative justices formulations. One is equal per capita allocation of absorptive capacity of the atmosphere given a temperature change target for global emissions. Yet another is where cuts by countries yield equal benefits per capita to other countries. A third is where there are equal costs per capita to countries making cuts. Finally, we also consider financial transfers to developing countries to compensate them for the costs of meeting emission restraints. The impacts of alternative emissions reductions differ sharply from the equi-proportional cuts of annual emissions implied by a continuation of the Kyoto process. These impacts emphasize the large and ill defined bargaining set for a post Kyoto Process involving large developing countries in a significant way. |
| JEL: | F00 Q54 Q56 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18443&r=ene |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | The international game of cap and trade begins when countries choose their quantity targets, which are largely selected according to self interest. The analogous public-goods game, in which countries choose their abatement levels, has an uncooperative outcome. Compared to that, the Nash equilibrium of the cap-and-trade game shows that abatement can increase but that trade provides opportunities for uncooperative behavior. By contrast, a game in which all countries vote for a global quantity target or a global price target can lead to a highly cooperative choice of target. However, the assignment of responsibilities for a global quantity target stymies implementation of a global cap. The global-price-target game largely overcomes this barrier because a uniform global price provides a focal point for cooperation. However low-emission countries apparently prefer a much lower global-price than more prosperous countries unless a Green Fund is implemented. A game that couples such a fund to the global price target can largely overcome this barrier to cooperation. We describe such a game along with its equilibrium outcome, which promises to be inexpensive and cooperative. |
| Keywords: | global warming, climate change, climate treaty, cap and trade, carbon tax, carbon price, public goods |
| JEL: | Q54 Q56 Q58 H41 D78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:12csgcg&r=ene |
| By: | Timo Busch (ETH Zuerich, and Duisenberg school of finance); Nils Lehmann (ETH Zuerich); Volker H. Hoffmann (ETH Zuerich) |
| Abstract: | Certain types of corporate social responsibility (CSR) activities can generate an ‘insurance-like’ benefit for firms (Godfrey, 2005). Thus far, this risk management hypothesis has been verified for the effects of firm-specific negative events. We argue that this insurance-like benefit of CSR-activities can be equally expected in the context of long-term developments which threaten current business models. We develop our arguments for the incremental, long-term process of internalizing negative externalities. For this, we consider the negative externalities resulting from the emission of greenhouse gases (GHG) and perform a panel analysis of a sample of 1699 firms over a period of 7 years. Our results show that firms can reduce their market-based risk by curbing their GHG-emissions. We furthermore propose an opposing effect on accounting-based risk, but do not find empirical support for this. We conclude that CSR-activities aimed at reducing a firm’s exposure to specific long-term developments can be sound corporate risk management, even if such activities may not yet be profitable. |
| Keywords: | GHG-emissions; negative externalities; financial risk; corporate social responsibility; long-term developments |
| JEL: | G30 M14 L20 Q20 |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20120102&r=ene |
| By: | Masakazu Maezuru |
| Abstract: | This paper analyses the political economy of environmental policies in the presence of an eco-industry pressure group. Previous studies have dealt with two types of lobbies: capitalists and environmentalists. We introduce a third pressure group representing the eco-industry sector. Under this type of economy, the incumbent government maximizes its chances of being re-elected. Its objective functions include social welfare as well as political contributions. The introduction of the eco-industry lobby introduces a new political contribution and modifies the incentives of the traditional lobbies. Furthermore, we underline the conditions under which environmentalists and eco-industries can become political allies. We also explain that, considering the overall profit of a vertical structure, an industrial lobby group can be favourable to a more stringent environmental policy. Next, we assume an open economy. In two countries, two polluting sectors are subject to an environmental policy. Therefore, an eco-industry sector which supplies pollution abatement goods and services arises. Abatement goods and services are assumed to be internationally traded, creating the only industrial interaction between both countries. The pollution, which can be transboundary or purely local, affects consumers in both countries; we analyse both cases. Our main findings can be summarized as follows. First, eco-industries lobby in favour of more stringent environmental policies, except if the impact of foreign competition more than compensates the turnover increase induced by a tighter environmental policy. Polluting firms always lobby against tighter environmental policies. However, an industrial pressure group, representing the industry as a whole and considering upstream and downstream profits, can sometimes be favourable to an increase in the environmental policy, as it leads to increased profits. We also show that an environmental pressure group can ask for a decrease in the environmental policy at home to decrease pollution abroad. This result does not rely on interactions between countries within the polluting sector. Interaction within the eco-industry sector is a sufficient condition for demonstrating that environmentalists can be favourable to a decrease in the local environmental policy. The impact of lobbying activities on the politically optimal environmental policy is ambiguous and depends on the relative concentration of each pressure group. Keywords: political economy, eco-industry, pollution abatement subsidies JEL classification: F12, H23, Q58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p700&r=ene |